LODI - The Lodi real estate market can be summed up in one word: slim.

And for many, it's frustrating, even as the median home sale price has climbed just over 16 percent in Lodi over the past year.

With a dearth of inventory to be sold and a plethora of buyers looking to take advantage of low interest rates, it looks like a seller's market is starting to emerge in the northern part of San Joaquin County. But real estate agents say that even as multiple offers pour in for their client's homes, the properties cannot appraise at a level to sustain such a bidding war.

"We have way more buyers than sellers. If a house is priced competitively, the multiple offers are incredible," PMZ Real Estate agent Leah Mettler said.

The problem is, agents say, if an eager buyer bids high above asking and the home doesn't appraise that high, the buyer has to come up with cash to cover the difference between his loan and the appraised value. So that depresses the sales price and pushes first-time home buyers out of the picture.

"The inventory says it's a seller's market, but the sales totals say it's not," Keller Williams Lodi agent Jack Mossman said. "The reality is, you can have 10 offers, but the appraiser will knock down the price. So it's not a seller's market in the way a seller's market used to be."

Median home prices have increased steadily in Lodi, climbing from $176,000 in December 2011 to $205,000 in December 2012, a trend that is similar to San Joaquin County, where inventory has been cut in half over the past 12 months. Still, many in the baby boomer generation are underwater on their mortgages. So the scenario where those "empty nesters" that would sell their home for equity to downsize and pad their retirement funds is not present in this market.

Mossman said the market won't truly change until the baby boomer generation is ready to sell and former first-time home buyers can afford to move up.

"I see this (low inventory market) continuing for at least the next 12 to 18 months," Lodi Realty World agent Randy Elliott said. "I don't see prices shooting up like in the past. Unless something changes dramatically, this is how it's going to be for a while."

San Joaquin County's market outside of Lodi tells a similar story. Low inventory exists in a market where there is a cap, based on appraisals, for how much a home can fetch in a bidding war. Cash buyers are king. Those applying for FHA loans or other government-assistance programs are having a hard time competing with buyers who have larger down payments to offer.

The difference in Stockton, however, is those investors who scooped up foreclosed properties when the city was labeled as ground zero of the foreclosure crisis are now starting to flip their properties for a profit. It's more active than Lodi, but far from booming.

Homes that were purchased when the median home price was $133,000 in January 2009 are now selling in a market where the median price is $182,000.

"I think the momentum is positive," PMZ Stockton President Ben Balsbaugh said. "But prices have not come up high enough for builders to come or for most sellers to put their house on the market. I do think we'll see 10 to 15 percent price increases over the next two years. We have a lot of frustrated buyers, and sellers can demand top dollar for their house."